FISAC Mix Adjustment Clause Draft.docx

The Air Force requires flexibility to periodically adjust priorities on the FPLOE CLINs within the scope of the level of effort (LOE). Accordingly, the contractor may be required to adjust skill mix as priorities are adjusted to meet technical objectives; however, there shall be no increase in the total man-hours for the LOE Contract Line Item Number (CLIN) as a result of adjusting priorities. Except as provided for in the annual adjustment provision below, adjusting priorities is considered to be within the scope of the LOE CLIN and does not constitute a “change” to the contract. Therefore, the contract shall not be modified when adjusting priorities. The contractor shall apply its best efforts towards accomplishing the contract work effort. The government and contractor shall work together to manage priorities.

An annual adjustment shall be allowed to the FPLOE CLINs for significant changes to the labor mix required to support adjusted priorities. This adjustment will only be applied prospectively to the impending annual and subsequent option periods by CLIN. As part of the initial source selection evaluation, the offeror is required to submit its proposed labor mix and fully burdened rates by labor classification to accomplish the level of effort required by the CLIN (CLIN Pricing Matrix Attachment in Section J). The contractor is required to submit the actual labor mix utilized, including actual labor hours by category, by year, and CLIN (CDRL A012, Performance and Cost Report). The adjustment will be computed by applying the actual labor mix experienced to proposed fully burdened rates by classification for the impending annual and subsequent option periods. A weighted average rate will then be computed representing the proposed weighted average rate adjusted for the actual skill mix utilized. This rate will then be compared to the proposed weighted average labor rate by CLIN for upcoming period. In the case of subsequent periods this rate will be compared with the weighted average rate as previously adjusted under this clause. At the conclusion of each annual period, if the weighted average rate adjusted for the actual skill mix utilize differs (upward or downward) in excess of +/- 10% then a significant change to the labor mix has occurred and an adjustment will be made to the impending annual and subsequent option periods by CLIN. No adjustment will be made for differences in actual vs. proposed rates. The intent of the adjustment is to increase or decrease the contact value based upon differences in the labor mix anticipated by the parties in the negotiation of the contract and will be applied on a prospective basis only.

Increases in the actual level of effort required will be based upon the increased labor/man-hours using the rates from the fixed priced labor hour rate matrix. Any decrease to the required level of effort will be based upon the decreased labor/man hours using either the weighted average rate proposed or the current weighted average rate if previously adjusted by this clause by CLIN.